Temporary economic relief measure provides much-needed revenue for devastated distilleries, convenience for consumers

In just 15 days, California distillers and consumers will no longer be able to enjoy direct-to-consumer (DTC) shipping for distilled spirits products – stripping distillers of a critical revenue stream and consumers of increased convenience. The California Artisanal Distillers Guild (CADG) and three leading spirits trade associations representing distillers of all sizes– the American Craft Spirits Association (ACSA),  American Distilling Institute (ADI) and the Distilled Spirits Council of the United States (DISCUS) – sent a joint letter today to Governor Gavin Newsom urging him to extend this lifeline for distillers and to approve SB 620 moving through the legislature to make this measure permanent.

“Direct-to-consumer shipping of spirits during the pandemic helped save Blinking Owl Distillery from permanent closure and taking it away now could devastate our business,” said Ryan Friesen, head distiller for Blinking Owl in Santa Ana, California and president of the CADG. “Plus, our consumers now expect to be able to receive Blinking Owl Products directly to their homes. We urge the governor to extend the temporary order and for the legislature to make DTC shipping permanent.”

Under an executive order from Gov. Newsom, which expires on December 31, 2021, California distillers have been able to ship direct-to-consumer since March 2020 as a temporary economic relief measure during the pandemic. This move is said to have saved many distilleries from permanent closure.

“For nearly two years now, distillers in California have proven that direct-to-consumer shipping of spirits can be a responsible way to sell their products and meet consumers where they are,” said Chris Swonger, president and CEO of DISCUS. “Stripping California distillers of the critical lifeline provided by DTC shipping would be a devastating blow as they continue to face economic hardships from the ongoing pandemic. Winemakers in the state have enjoyed this privilege for more than three decades, and it is well past time California’s booming distilling industry was allowed to do the same.”

The joint letter points to a survey conducted in March 2021 by IWSR Drinks Market Analysis, which found that more than 75 percent of Californians surveyed agreed they should be able to order spirits directly from distillers and that distillers should have the same privileges as wineries to ship directly to consumers.

“Without extended relief allowing for continued direct from producer shipments of spirits, consumers will be surprised and annoyed that products they’ve come to enjoy are no longer accessible,” said Margie A.S. Lehrman, CEO of the ACSA. “Further, the resulting decreased sales will pose an economic hardship in an industry that has already suffered due to closed tasting rooms.”

The letter also pointed out that winemakers in California have been able to ship wine since 1986, yet distillers have been prohibited from doing the same.

“Without direct-to-consumer shipping during the pandemic, many of our favorite distilleries may not have survived,” said Erik Owens, president of ADI. “In fact, distillers across the nation have reported direct-to-consumer shipping has been a saving grace and a much-need source of revenue during the economic hardships of COVID-19. What’s more, consumers have changed their purchasing habits, and there is no going back. It’s time to do away with antiquated DTC shipping bans so distillers can meet consumer expectations and compete in the rapidly changing marketplace.”